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How to build customer loyalty
We’ve all been in this situation. You see an offer from a service you use. They’re offering 50% off for the next six months. What a deal! You’re getting your credit card out and then you see it… ‘For new customers only’. And you feel cheated. You’ve been with them for years and have never been offered any kind of reward. It sucks, and for the company in question, they’ve totally missed the mark.
Enticing new customers with a great deal is all well and good. Most businesses need to do it. But when you’re dishing out offers to new customers with one hand, you also need to be rewarding your existing customers with the other. In this article, you'll discover how to build customer loyalty in today’s challenging landscape - and how to keep it.
The shape of customer loyalty today
Rewarding and building customer loyalty is more important than ever before. Why? Because customers – every single one of us – have been impacted by the pandemic, Brexit, delays in the supply chain, inflation, cost of living crisis, price hikes, and a huge surge in e-commerce competition.
All of this means the shape of customer loyalty has changed. Customers will now very quickly withdraw their spending power when their needs aren’t being met by a brand. But they’ll also be more generous with their love than ever with a brand that matches – and exceeds – their expectations.
So what’s the first step in increasing customer retention and building brand loyalty? It’s all about what you say, and when, where and how you say it…
Communication rules
Outstanding communication is, without doubt, the most important factor in retaining customers and earning their loyalty.
Customer reviews
Start by getting some cheerleaders on board. We’re not talking pom poms and high kicks here. We’re talking about existing customers. They can help you attract new customers by leaving you positive reviews. From a study conducted by the content marketing platform, Yotpo, in December 2022, 20% of 3,800 respondents said they chose to make their first purchase with a brand based on positive customer reviews. A further 16% put it down to friends and family recommendations. Another 20% put it down to price, and a further 20% put it down to product quality. In summary, 36% purchased because of positive online reviews or word-of-mouth. So, don’t be afraid to ask customers for feedback. Make it easy for them to leave an online review by providing them with a link or displaying the functionality on your website. Ask them to spread the word and refer friends and loved ones. And incentivise them to do so. This is especially important – more on this later.
Follow up
If you don’t have a post-purchase follow-up strategy, you need to start creating one. In the same Yotpo survey, 28% of shoppers responded that a sale brought them back to make a second purchase. This may sound obvious, but what made these people aware of the sale? Smart e -commerce retailers will email their subscribed customers 7 days, 30 days, 60 days and 90 days after a purchase, with carefully tailored messaging at each touch point. This might include an email to see how they liked their purchase (this is also where you can ask for reviews), followed by sale emails, information about complementary products or services, and bespoke offers just for them. This may sound like overkill, but 57.5% of respondents in the study said they’d like to receive information about offers and sales. So think about the post-purchase journey for your customers. What else can you offer them of value? When it comes to follow-up communications, personalisation and relevancy will make all the difference between an unsubscribe and another purchase. And experiencing great customer service during the first purchase will pave the way for future ones.
Inform & engage
With product prices increasing, customers want to see that value recouped in other ways. Your communications are where you can demonstrate that value. Email is an incredibly powerful tool, but there are other ways of having a strong online presence, too.
Make sure your website is user-friendly, mobile-friendly and fast. Install an online chatbot to automatically answer basic questions or FAQs. Make sure it’s super easy for customers to contact you if they have a question or problem, and encourage them to leave feedback and reviews. Keep your content and products up-to-date, promote offers on key pages, and cross-promote products and services. Publish helpful blogs on your site that relate to your products or services, and then promote them on social media.
When it comes to social platforms, choose the channel your audience is spending the most time on, provided it fits with your offering. You don’t need to be on lots of channels – that’s a huge amount of work. It’s far better to have just one channel and do it well than have three or four and never have time to post.
Ultimately, any communication you have with a customer is a chance for you to nurture that relationship. Once you have a loyal customer, you can’t take that loyalty for granted. It has to be earned again and again, and the only way to do that is to be accessible, communicative and relevant.
Know your products & your customers
Sales representatives and staff can be the best advocates for your brand. If they use your products or services, they are ideally placed to sell them. They should also take time to ask questions and learn what the customer is looking for in terms of features. Not only does this provide them with a better understanding of the customer; there is also the potential for them to bond over the product, especially if the sales agent has a detailed understanding or experience of it. When it comes to purchasing, it’s not just logic at play. Emotion comes into it, too. Your sales team can gain trust through emotional connection, no matter how small, and customers who relate to a sales agent will be more likely to buy.
If you’re selling online, get to know your existing customers through the data they provide you. It’s often an untapped fountain of knowledge. If you’re using WooCommerce or Shopify, they have useful analytics tools offering lots of insight into your customers' buying patterns. Connect them up with a powerful email platform like Klaviyo and you can get valuable insights into a customer’s potential next move through its clever forecasting tools. If you use an alternative platform to monitor sales data, make full use of the system's built-in reporting tools. The power of deeply understanding who your customers are and their behaviour should not be underestimated.
Implement a customer rewards loyalty program
In Yotpo’s 2023 study, 53.2% said they would continue to purchase from a brand if they had a loyalty program. Customers with rewards accounts are more likely to spend more with you because they get perks when they spend. They’re also more likely to recommend you to their friends and family when they see the benefit of those perks in tangible form, such as discounts, exclusive early access to new products, birthday treats and more.
Flexibility and good value are essential when it comes to running a successful loyalty program. People want to be able to earn and spend their rewards in a way that suits them, without being dictated to. So make sure your program is flexible. This could include earning points on every purchase, points for their birthday, points when they refer a friend or engage with your brand on social media, and points when they leave a review. Let them exchange their points for vouchers that they can spend on any product, in-store or online, and ones they can send to a friend as a gift card. There are many excellent loyalty program providers out there now offering out-of-the-box solutions that can integrate with a broad range of web platforms. Two of the largest are Yotpo which integrates with dozens of other web applications and Smile.io which connects with Shopify, BigCommerce and Wix.
Create a mobile app
Mobile apps were once the preserve of big businesses with big budgets, but that’s no longer the case. With the average person spending at least three hours a day on their smartphone, small businesses have jumped on the bandwagon. An app is a significant investment, but it provides an omnichannel experience for your customers, connecting them with exclusive products, services, in-store and online benefits, rewards programs and more. It’s also another channel for new customers to find you. And an app is an easy way to gather data on your customers’ buying patterns.
Loyalty wins
Consumers have made it clear that it’s no longer enough to lure them in with one great introductory deal and then forget about them. Customer retention is now multi-faceted. Businesses need to deeply understand their customers, meticulously plan the post-purchase experience, and communicate with buyers at every stage in a nuanced way. It takes work, but tackle one area at a time and you’ll quickly start seeing small wins. Persist with it, do your homework and the small wins will eventually become big wins.
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We've been helping small businesses in the south west for over 30 years. Whatever challenge your facing - whether it's planning, finances, marketing, pricing, customer loyalty, HR, sustainability or something else - we can help. Our Business Support page shows all the current fully-funded, Government-backed programmes we have on offer.
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